• 2017 October 26 16:13

    The signs of fuel market rebalancing support bunker prices

    The Bunker Review is contributed by Marine Bunker Exchange

    World fuel indexes have stayed steady with no significant fluctuations during the week. The oil and fuel markets are tightening gradually. OPEC is expected to roll over output restrictions for another nine months. Geopolitics are still one of the main drivers on the market. The ‘Fragile Five’ petrostates - Iran, Iraq, Libya, Nigeria and Venezuela - continue to see supply disruption potential, with northern Iraq crude exports at risk due to an escalation of tensions between the Kurdistan Regional Government, Baghdad and Turkey, while the United States has decertified the 2015 Iran nuclear deal.

    MABUX World Bunker Index (consists of a range of prices for 380 HSFO, 180 HSFO and MGO at the main world hubs) has not demonstrated any firm trend as well in the period of Oct.19 – Oct.26:

    380 HSFO - down from 333.57 to 332,36 USD/MT (-1.21)
    180 HSFO - down from 371,79 to 372,00 USD/MT (-0.21)
    MGO         - down from 559.21 to 555.50 USD/MT  (-3.71)

    The Energy Information Administration reported unplanned disruptions in global oil sup-ply dropped to 1.6 million barrels per day (bpd) in September 2017, which was the lowest level of crude offline due to unforeseen events since January 2012. The main reasons were reduced outages in Libya, Nigeria, and Iraq. As of September 2017, civil conflict in Libya and militant activity in Nigeria saw a decrease in recent months. As a result, global unplanned oil supply disruptions have dropped by more than 1 million bpd over the past six months.

    OPEC reported record compliance to its 10-month old output reduction agreement: a 120 percent compliance rate in September.  Cartel considers the oil market is balancing at an accelerated pace, and demand will continue to rapidly grow in coming decades. The original deal, struck nearly a year ago between OPEC and 10 other non-OPEC countries led by Russia, was to cut production by 1.8 million barrels a day for six months. The agreement was extended in May of this year for a period of nine months until March 2018.

    OPEC also suggested that Russian President Vladimir Putin’s comment about extending the production through the end of next year would be the basis for up-coming negotiations ahead of the highly-anticipated meeting in Vienna on November 30. An extension is not a done deal yet, but the comments from OPEC officials are the strongest yet.

    Outages in Iraq dropped to 50,000 bpd in September. However, political tensions in the Kurdistan region continued to disrupt crude supplies with oil exports from Iraq's Kurdistan to-wards the Turkish port of Ceyhan reportedly flowing at average rates of between 200,000 and 300,000 barrels per day (bpd) versus the usual flows of 600,000 bpd. The supply disruption in Iraq comes amid ongoing political uncertainty in the region following conflict between Iraqi and Kurdish forces. Iraqi troops marched toward Northern Iraq earlier in week and regained control of two major oilfields from Kurdish forces.

    It’s still unclear if the U.S. will reimpose sanctions against Iran and the possible impact of this action will be uncertain. Most likely, they’ll be less effective than the sanctions coordinated by the international community prior to 2016. Shortly after President Trump announced that he was decertifying the nuclear deal, the leaders of France, Germany and the UK issued a joint statement supporting the continuation of the agreement. Iran also said that it will continue to abide by the agreement.

    Venezuela is increasingly shipping poor quality oil to refiners in the U.S., India and China, causing complaints and demands for discounts. The problems are the direct result of equipment and chemical shortages, and the weakness of Venezuela’s oil industry. Besides, Venezuela has missed seven interest payments this month totaling over $590 million, raising fears of an imminent default. Among the immediate effects of it would be a shutdown of the crude and refined product imports on which Venezuela increasingly depends. Exports and oil tankers would be at risk of seizure.

    One of the market rebalancing signs is that U.S. commercial stocks of crude oil have dropped 15 percent from their March records (despite of reported build of 900,000 barrels last week) to 457.3 million barrels, still below levels seen last year. Part of this drawdown has been due to rising exports as a result of the steep discount of U.S. crude to Brent, which makes it attractive for American producers to export their oil. Shipping data shows that overseas U.S. crude oil shipments have increased from zero point in late 2015 (when the U.S. government loosened export restrictions) to around 2.6 million bpd in October.

    Besides, there has also been a string of lower rig counts that has served to re-inforce bullish sentiment as it suggests the growth in shale oil production is slowing down, spelling a potentially tighter global market.

    In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers. China’s oil demand remains on a high level, hitting a January to September average of 8.5 million barrels per day (bpd). The main drivers are: declining domestic production, increased access to imports and exports for inde-pendent refiners, and building up the strategic petroleum reserve. India’s fuel demand is also increasing. India imported a record 4.83 million barrels per day (bpd) of oil in September (4.2 percent above this time last year and about 19 percent more than in August) as several refiners resumed operations after extensive maintenance to meet rising local fuel demand.

    All in all, further steps by OPEC, rising global oil demand and the reduction in U.S. drilling and its crude oil stocks are some of the factors that could lead fuel prices higher in the short term. We expect bunker prices have a potential to resume upward movement next week.







    * MGO LS
    All prices stated in USD / Mton
    All time high Brent = $147.50 (July 11, 2008)
    All time high Light crude (WTI) = $147.27 (July 11, 2008)

2020 February 26

09:35 Brent Crude futures price is up 0.65% to $54.61, Light Sweet Crude – up 0.8% to $50.3
09:17 Baltic Dry Index is up to 508 points

2020 February 25

18:06 Maritime world players gather in Antwerp for World Ports Conference 2020
17:51 Four new IBIA board members announced at AGM
17:30 ClassNK develops its Digital Grand Design 2030
17:18 Piraeus Bank enters into a strategic collaboration with ORIX Corporation to provide financing solutions to the Greek maritime sector
17:02 DNV GL awards MSC new container ship fire safety notation
16:36 Foreship scrubber enquiries surge as owners clear the air
15:59 Trust Management sells crude oil tanker FSL Shanghai
15:49 RF Navy’s Baltic Fleet starts preparing for "Sea Cup" competition
14:58 Gazprom Neft’s net profit exceeds RUB400 billion in 2019
14:33 World Bank presents results of its study on prospects for strengthening Ukraine’s port sector governance
14:05 Marakeb Technologies and Fincantieri sign MOU for unmanned technology collaboration
13:27 THE Alliance announces details of 2020 Middle East service network
12:42 Container Terminal Saint-Petersburg upgrades its fleet of production equipment
12:17 COSCO SHIPPING Lines maintains logistics chain for international trade
12:01 KSS Line adds one new VLGC model after four vessels in 2019
11:25 DP World acquires the largest multi-purpose deep-sea marine terminal on the West Coast of North America
11:16 PPA scores big in latest survey, continues to veer away from 'corruption' tag
10:43 World Maritime University signs MoU with Maritime Academy of Asia and the Pacific
10:15 Logistics specialist leases Newport Docks warehouse
10:14 CMA CGM announces PSS from Europe, Scandinavia, Black Sea & West Med to Reunion, Mauritius, Mayotte, Comoros, Seychelles & Madagascar
10:09 MABUX: Bunker market this morning, Feb 25
09:51 Throughput of port Shanghai (China) in Jan’20 fell by 13.2% to 41.75 million tonnes
09:30 Brent Crude futures price is up 0.3% to $55.94, Light Sweet Crude – up 0.39% to $51.63
09:12 Baltic Dry Index is up to 506 points

2020 February 24

16:43 MOL and DSME sign joint development agreement for environmental friendly FSRU technology
15:06 Wilhelmsen Group's fourth-generation owner Wilhelm Wilhelmsen dies
14:53 MABUX Digest: Top events on global bunker market. Week 08
12:54 Milaha participates in ‘Made in Qatar 2020’ Exhibition as a Gold Sponsor
10:45 MABUX: Bunker market this morning, Feb 24
10:11 DOF Subsea posts Q4 operating income of NOK 1,349 million

2020 February 23

15:01 Great Lakes reports record full year results
14:32 AAM completes 80’ patrol vessel for the Texas Parks and Wildlife Dep't
13:37 EDS HV Group completes scope of work at Vattenfall’s HR3 wind farm
12:23 Ingeteam signs the contract with Yantai CIMC Raffles Offshore for hybrid electric propulsion system delivery of two Ro-Ro vessels
11:21 USCG, other agencies to conduct search and rescue exercise near Perdido Bay

2020 February 22

17:14 First Subsea provide Cable Protection Systems for NnG
14:48 Med Marine: Turkish-built tug equipped with SCHOTTEL bestseller
13:41 CSBA study finds U.S. dredging industry a critical component of national security
11:39 USCG Cutter Legare returns home after interdicting over 3,300 pounds of drugs
10:47 Ray Fitzgerald to rejoin Crowley as COO

2020 February 21

18:12 Digitization of KN: paper is no longer used in the operation of Klaipėda LNG terminal
17:48 NIBULON Shipyard is about to launch second non-self-propelled open type vessel
17:17 CMA CGM announces Emergency Space Surcharge from North Europe, Scandinavia & Poland to West Med, East Med, Adriatic & North Africa
16:59 New roll trailers put into operation at Bronka port
16:04 AS Tallink Grupp’s wholly-owned subsidiary AS Hansatee Cargo merged with Group’s wholly-owned subsidiary AS Tallink
15:25 Russia's Main Department of State Expertise approved adjusted design documentation under Nord Stream 2 project
15:02 OCEAN Industries orders MAN Propulsion Packages for Royal Canadian Navy tugs
14:13 Diana Shipping announces time charter contract for m/v Coronis with Koch and cancellation of the sale of a Capesize dry bulk vessel
13:01 COSCO SHIPPING Lines provides water and rail transport services
12:40 Wärtsilä LPG Fuel Supply System the first ever to undergo engine testing
12:12 ABS to class world’s largest B-Tank VLECs by Jiangnan
11:30 Coronavirus disease 2019 – IMO urges no unnecessary delays to ships
11:09 World’s first LPG-retrofit order exercises option for four additional engines
10:44 MABUX: Bunker market this morning, Feb 21
10:43 Biofouling demands collective, urgent and ‘proactive’ approach, stresses Bellona
10:09 Cod farming set for rebound as savvy investors rush to back Norcod
09:55 Bunker prices are slightly down at the port of Saint-Petersburg, Russia
09:43 GTT acquires Icelandic company Marorka, an expert in Smart Shipping